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NZ electricity companies cautious on emerging technologies investment Image courtesy of Stuart Miles at FreeDigitalPhotos.net Featured

Investment in emerging technologies by New Zealand electricity companies is still relatively small, with most companies to date just focusing on research and development, according to the country’s competition enforcement agency, the Commerce Commission.

Commerce Commission deputy chair Sue Begg says Vector is the largest investor, devoting about 5% of its overall regulated expenditure to emerging technologies compared with the industry average of 1%.

“As this expenditure is still embryonic, we have not yet formed views on how these investments might be affecting competition in markets adjacent to electricity networks,” Begg said.

“As you would expect, there is strong interest in electric vehicle chargers, with NZ$5 million invested to date in this technology. But there is uncertainty about the impact EVs will have on networks in the near future and the ability of lines companies to manage increased loads. This will depend on the pace of technological advancement in terms of battery range and charging speed, as well as the affordability of EVs for New Zealanders.

“From the information we’ve gathered, it’s also apparent that some lines companies are unsure about how to treat their investments under the current regulations. We believe some may be inappropriately recovering the cost through their existing regulated services and we will be seeking to better understand the reasoning for the approaches they have taken.”

Begg said the Commission wanted to learn more about the technologies lines companies were investing in, what impact the technologies were having on their respective networks, and how they were accounting for their investments within the current regulatory regime.

According to Begg, the data on line companies gathered by the Commission may help inform the government’s electricity pricing review.

In May this year, the Commission published an open letter outlining its intention to gather information from lines companies to better understand how they are planning, investing and accounting for emerging technologies.

The letter also reminded lines companies about:

  • How emerging technology costs and revenues should be accounted for in order to comply with their regulatory requirements, including new guidance on when investments in electric vehicle chargers can be included in their regulated asset; and
  • Their obligations under Part 2 of the Commerce Act to ensure they do not enter into agreements which will substantially lessen competition, or take advantage of market power for an anticompetitive purpose in unregulated and competitive energy services markets they are seeking to enter or already participate.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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